"We sometimes need your permission to do what you ask us to do with your stuff (for example, hosting, making public, or sharing your files). By submitting your stuff to the Services, you grant us (and those we work with to provide the Services) worldwide, non-exclusive, royalty-free, sub-licensable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent we think it necessary for the Service. You must ensure you have the rights you need to grant us that permission."

The term "stuff" bothered me. I finally found what Dropbox considers "stuff":

"By using our Services you may give us access to your information, files, and folders (together, "your stuff"). You retain ownership to your stuff. You are also solely responsible for your conduct, the content of your files and folders, and your communications with others while using the Services."

The above changes made to the ToS raised a ruckus; witness for yourself on the Twitter account Dropped Box. The site icon could be considered offensive.

The very next day July 2, Dropbox changed the ToS policy to reflect feedback:

"We asked for your feedback and we've been listening. As a result, we've clarified our language on licensing:

You retain ownership to your stuff. You are also solely responsible for your conduct, the content of your files and folders, and your communications with others while using the Services.

We sometimes need your permission to do what you ask us to do with your stuff (for example, hosting, making public, or sharing your files). By submitting your stuff to the Services, you grant us (and those we work with to provide the Services) worldwide, non-exclusive, royalty-free, sub-licensable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent reasonably necessary for the Service. This license is solely to enable us to technically administer, display, and operate the Services. You must ensure you have the rights you need to grant us that permission.

Drew & Arash"

Contentious part

It appears that Dropbox is saying they have rights to do anything they want to with "stuff" after it is uploaded to Dropbox servers:

"By submitting your stuff to the Services, you grant us (and those we work with to provide the Services) worldwide, non-exclusive, royalty-free, sub-licensable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent reasonably necessary for the Service."

I suspect that Dropbox management feels they need this to cover themselves when members share their "stuff" with others. Is that your take?

Not alone in this

As I was preparing this post, I asked a colleague what she thought about this. She said it's not uncommon; Facebook, she added, has something similar. Oh — really? I had to check that out.

"For content that is covered by intellectual property rights, like photos and videos ("IP content"), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook ("IP License"). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it."

"Intellectual property (IP) is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized-and the corresponding fields of law. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs."

Like Dropbox, Facebook has a section that attorneys love:

You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook ("IP License")."

What does it mean?

Beats me. I'd need to be an attorney specializing in intellectual property to understand. One thing I do know — there's a lot at stake. Meaning, entities such as Dropbox and Facebook are motivated to protect their figurative behinds, so we need to do the same.

Update (04 Jul 2011): I asked Dropbox management about the policy changes, but have not received an answer as of post time.
Update (08 Jul 2011): Dropbox has again altered their Terms of Service. It appears they have been listening. Much of what has been questioned by myself and members in the comments has changed. Please read the new version and let us know what you think.

I also received the following update from Julie Supan, Dropbox spokesperson:

"Millions of people rely on Dropbox for their life's work and are passionate about the service. People felt our terms were unclear and we wanted to make them easier to understand. We value our users' trust and we will continue to listen to them closely."